Gaming Wars May Bring Slots to L.A - What Will Happen to Poker?

[Rick Nebiolo]

You may need to register to view this Los Angeles Times article (http://tinyurl.com/2g6pj).

My questions:

How do you think this will shake out?

If the ballot initiative (the one allowing slots in card clubs) is passed, where will the Commerce and Bike put their poker table if they each get to install 1700 slots?

Note: "poker table" is not a typo /images/graemlins/frown.gif

~ Rick

PS Do you think anyone will need a 50 year old slot mechanic? I worked ten years in part for Hughes Aircraft Company's Displays Lab (and some of the militarized displays looked a lot like slot machines).

[El Dukie]

Yeah, I read that article this morning. The good news (?) is that the Indian casinos are saying they'll spend up to $100 Million to defeat the initiative.

I'd hate to see the end of large-scale casino poker in SoCal, but I have a feeling that's what will likely happen if this passes....

[Dynasty]

California poker is in big trouble if the fishies are allowed to play slots and other casino games (blackjack, craps, roulette, etc.).

There just isn't very much casino floor space in the California rooms. The Commerce is huge- for a poker room. But, it's very small for a casino. There are some very large casinos in Las Vegas that don't even bother with a small poker room (MGM Grand, Venetian, Caesars Palace). There's much more money to be made spreading other casino games.

[snakehead]

I don't know about the bike, but commerce already has plans in case they are allowed to have slots. they plan to keep poker also, since they will only be allowed a certain number of slots. since they have a very large second level, they have lots of room for both.

but I really don't think it's going to happen. I think the indian casinos will give the state a piece of their action in order to keep slots out of la.

[Rick Nebiolo]

[ QUOTE ]
I don't know about the bike, but commerce already has plans in case they are allowed to have slots. they plan to keep poker also, since they will only be allowed a certain number of slots. since they have a very large second level, they have lots of room for both.

[/ QUOTE ]

What about parking (or access to the facility, even if the Commerce/Bike/Hustler build parking garages)? Parking and access are ultimately the limiting factor, and the Commerce and even more so the Bike or Hustler don't have a lot of room to expand. Upper management may tell their current customer base they "plan to keep poker", but the pressure to accomodate and cater to slot players will be enourmous. Vast number of people live within an easy drive of the big Los Angeles poker clubs. For every poker player, I would guesstimate dozens play slots.

[ QUOTE ]
but I really don't think it's going to happen. I think the indian casinos will give the state a piece of their action in order to keep slots out of la.

[/ QUOTE ]

I hope you're right. Of course, ultimately the indian casinos want to keep competition out and would like to enter the cities themselves.

In any event, the resulting "neighborhood" slot mills will likely be very depressing. Think bingo hall with less class.

~ Rick

[Rick Nebiolo]

[ QUOTE ]
California poker is in big trouble if the fishies are allowed to play slots and other casino games (blackjack, craps, roulette, etc.).

[/ QUOTE ]

Even if floor space is left over for poker, you are absolutely correct. Why lose to fellow players and the house, when by playing casino games you only lose to the house?

[ QUOTE ]
There just isn't very much casino floor space in the California rooms. The Commerce is huge- for a poker room. But, it's very small for a casino. There are some very large casinos in Las Vegas that don't even bother with a small poker room (MGM Grand, Venetian, Caesars Palace). There's much more money to be made spreading other casino games.

[/ QUOTE ]

My understanding is that both the Bellagio and Mirage largely retain poker because Bobby Baldwin protects it and Kirk K. wants Bobby Baldwin. Of course Las Vegas competes on a grand scale for out of state tourist dollars, and the closely grouped together strip casinos must be more than slot barns. That won't be the case in Los Angeles, as a pure slot barn will do just fine, especially if it is unlikely new facilities open.

In non prime areas of Las Vegas, you eventually have enought casino floor space where the incremental profitability of adding more slots is no more than that of a poker room. That's why most Las Vegas poker tables (other than those at the Bellagio and Mirage) are off the strip.

~ Rick

[Dynasty]

[ QUOTE ]
That's why most Las Vegas poker tables (other than those at the Bellagio and Mirage) are off the strip.

[/ QUOTE ]

I don't think that's true. The following casinos on the Strip have small poker rooms: Mandalay Bay, Luxor, Excalibur, Monte Carlo, Flamingo, Stardust, Circus Circus, and Sahara. That's about 70 tables. I don't think there's that many off the Strip although it's possible that the Orleans and Horshoe give off-Strip the advantage.

[Rick Nebiolo]

Perhaps a better way for me to express this idea is that although Las Vegas allows almost unlimited expansion of the size and number of casinos (subject to available space and access), casino real estate is still precious, especially on the strip. Poker ends up as a small and vulnerable part or the business, often ending up as important to casino profits as the deli (fortunately, some casino owners and executives believe you need both anyway /images/graemlins/grin.gif).

Maybe I'm a little out of touch regarding Las Vegas. The last time I made time for a trip the Bellagio wasn't even open!

~ Rick

[andyfox]

I'm the only one I know who believes the opposite will happen if slots come to L.A.: poker will be expanded. There will be a much larger group of people coming into the casinos. There's a large group of poker players in the L.A. area who haven't been weaned on other games. And I don't see a World Slots Tour on TV. So I think there's going to be a growing percentage of people interested in poker and a growing percentage of people visiting the casinos.

As far as the space consideration, I wouldn't be worried about this. They'll build up, they'll buy and build out, they'll build down. People will come, so they'll build it.

Looks like there'll be a bunch of propositions on the ballot and the Indians will have to make a good deal for the state, otherwise the governor will support one of the other propositions and with the state in such dire financial straits, I think the people will go along with whichever one he says will do the most financial good. I think people will also start to realize the state didn't get a very good deal with the Indians the first time.

[Duke]

[ QUOTE ]
I think people will also start to realize the state didn't get a very good deal with the Indians the first time.

[/ QUOTE ]

According to my liberal education, it is the Native Americans (only using this term to avoid the whole "worship cows, but slaughter buffalo" confusion) who have been getting the raw deal continuously since... inception?

~D

[andyfox]

Yes, Native Americans is a better term than Indians, which, of course, was the term invented by Columbus who mistakenly believed he was in the Indies, the general term in Europe at that time for Asia. The Native Americans themselves had no general term for the entire population.

The holocaust and subsequent raw deals that the Native Americans experienced is perhaps the greatest tragedy in the history of the world. California's 370,000 inhabitants were virtually wiped out by the Spaniards who invaded their home and missionized them to death. I am well aware of the history of our mistreatment of native Americans.

However . . .

If one reads any of the excellent books on Foxwoods that are available, or studies the agreement made by the tribes with the State of California, one can see that many of the tribes (and some of them became tribes only to open up casinos) have literally hit the jackpot.

The California tribes have pledged to spend $100,000,000 to keep their slot machine monopoly. While they don't make their figures public, they must be making a helluva lot of money to be able to come up with $100,000,000 for a political campaign.

[AceHigh]

[ QUOTE ]
casino real estate is still precious,

[/ QUOTE ]

Um, they have a huge freakin' lake just sitting in front of there property and 5 or 6 pools. They can afford some real estate for a poker room.

[Rick Nebiolo]

Las Vegas is a tourist town. Tourists in Las Vegas expect pools, enormous fountains, plastic volcanos, mock pirate ship battles, miniature Eifel Towers, a not so miniature New Youk City, Gondola rides and giant buffets. Poker is off the radar of most tourists /images/graemlins/grin.gif

~ Rick

[Six_of_One]

Just for the record, I agree with you, Andy. So although you don't know me, you're not the only one who feels that way. Everything you said is pretty much exactly how I feel. I hope the initiative passes.

[Rick Nebiolo]

Andy,

You wrote:

[ QUOTE ]
I'm the only one I know who believes the opposite will happen if slots come to L.A.: poker will be expanded. There will be a much larger group of people coming into the casinos.

[/ QUOTE ]

If slots come to LA there probably will be a longish period where no new casinos/raceinos/gambling facilities will be voted in or allowed. During that period the demand for space for slots (and other casino games if they are allowed) will overwhelm the demand for poker, just as it does in other multi-game gambling Mecca’s. The card clubs will rightly do what is most profitable. Since card club space is limited and would take a long time to expand, poker will be out.

[ QUOTE ]
There's a large group of poker players in the L.A. area who haven't been weaned on other games.

[/ QUOTE ]

Yup, and the poker players with social networks might be able to get into illegal home games. Unfortunately I'm socially challenged.

[ QUOTE ]
And I don't see a World Slots Tour on TV.

[/ QUOTE ]

OK. Demand for poker will remain huge, but there will be no legal and available outlet. Demand for poker is huge in New York, but unless you frequent "Social Clubs" you will have trouble finding a big game.

[ QUOTE ]
So I think there's going to be a growing percentage of people interested in poker and a growing percentage of people visiting the casinos.

[/ QUOTE ]

The casinos will be mobbed 24/7 but they won't find much poker. Expect rows and rows of slots with minimal amenities.

[ QUOTE ]
As far as the space consideration, I wouldn't be worried about this. They'll build up, they'll buy and build out, they'll build down. People will come, so they'll build it.

[/ QUOTE ]

The Bike is hemmed in. The Commerce is hemmed in somewhat but they could buy. They could take down a hospital to expand Hawaiian Gardens. Crystal Park will go up in value a hundredfold. Hollywood Park will have plenty of room, but it is still awkwardly situated at the end of a grandstand. The Hustler and Normandie are on small lots in residential areas. There will be chaos for years.

[ QUOTE ]
Looks like there'll be a bunch of propositions on the ballot and the Indians will have to make a good deal for the state, otherwise the governor will support one of the other propositions and with the state in such dire financial straits, I think the people will go along with whichever one he says will do the most financial good.

[/ QUOTE ]

I hope this is just going to be a tool to shake a better deal out of the Indian casinos. In the long run putting the crack cocaine of gambling within an hour’s drive of 12 million people and a 20 minute or shorter drive from millions of poor working people won't be a financial windfall. But I digress /images/graemlins/grin.gif

[ QUOTE ]
I think people will also start to realize the state didn't get a very good deal with the Indians the first time.

[/ QUOTE ]

Agreed. In part this shows the weakness of legislation by initiative.

Regards,

Rick

[AceHigh]

The point is, a poker room is small potatoes compared to the total size of the property. Vegas casinos are way under utilized. The average utilization of the slot machines are fairly low. For instance, I'm sure Atlantic City slot machine get used more than Vegas slots. You can always find (lots of) open slots at the Bellagio.

Ask the Vegas regulars how long the lists are for the Bellagio Pokerroom on a Saturday night.

Now if the number of slot players in Vegas suddenly increases by tenfold, you will start to see pokerrooms disappear.

[TimTimSalabim]

[ QUOTE ]
Ask the Vegas regulars how long the lists are for the Bellagio Pokerroom on a Saturday night.

[/ QUOTE ]

And I have the feeling that a lot of casinos in Vegas are now wishing they hadn't closed their poker rooms and replaced them with slots over the past few years. I'd be willing to bet we'll see some Vegas casinos starting to add poker rooms in the near future.

[Rick Nebiolo]

Las Vegas is an open gambling market that primarily depends on out of town tourists to make money. Since it is an open market, slots expand to the point where incremental slots are no longer profitable. That means many slots go unused most of the day and some slots are hardly ever used (but the slot space in a far corner of an unpopular casino may have no better use).

With the boom in poker, many casinos in an open market such as Las Vegas may in fact reintrodue poker rooms. But Los Angeles isn't an open gambling market. If the limited floor space must be allocated to what brings in the most profits. That space will be overwhelmingly given to slots.

~ Rick

[Rick Nebiolo]

As I was leaving the local Wal Mart this morning with my $2.97 gallon jar of pickels, some poor guy with a clipboard came up to me to ask if I wanted to sign a petetion to get the initiative discussed in this thread on the ballot.

Let's just say the conversation (actually, it wasn't a converstion since he didn't get in many words edgewise) ended with him pleading, "Sorry, I'm really just a hired gun and didn't really know what this was all about."

~ Rick

PS I hope John Cole reads this since he will be able to picture the scene perfectly /images/graemlins/grin.gif

[El Dukie]

Not surprising. I'm often approached by one initiative-seeker or another trying to get my signature. If I bother to pay any attention to them, I always ask them detailed questions about the initiative they're pushing. They usually don't know anything about it.

[andyfox]

All good points, Rick. But I still feel poker is entering a boom time (see the Calendar section cover story today) and the card rooms will be pushing poker. A full 20-40 table running all the time will gross over $1,000,000 for a card room and I'm not sure that slot machines which would replace a table can generate those kinds of dollars (although the net results might be different).

We all felt poker would be reduced when the Asian games hit the card rooms and we saw the tremendous action they generated and the new customers. All of the cardroom didn't reduce the number of poker tables, but rather expanded to accommodate the new games. While some of the card rooms are indeed somewhat circumscribed by their neighbors, I still think that they'll build up where necessary.

[TimTimSalabim]

Also, having a poker room generates more revenue for the casino beyond just what the room rakes. Poker tournaments generate a lot of interest in a casino (would anyone bother to go to the Horseshoe otherwise?). A couple might choose a casino that has a poker room so that he can play poker and she can play slots. And so on.

[Lee Jones]

I reckon that slots in L.A. would basically put poker out of business. Sure, there'd be a smal enclave of poker somewhere - maybe one of the smaller shops would try to survive by being the poker capital. But I think the scenes that we take for granted at Commerce, Bike, and HP (poker tables as far as the eye can see, 24/7) would quickly be just a memory.

Regards, Lee